Thursday, January 19, 2006

On who stands to gain

The CP takes a look at who would stand to benefit most from the Cons' tax-cutting proposals - and it should come as no surprise that Canadians who already make less money stand to get far less than their wealthier counterparts:
By simply offering every family a flat $1,200 for each child under six each year, (the Cons' child-care plan) will inflate incomes of poorer parents which will then trigger clawbacks of other income-based support programs...says (Ken Battle of the Caledon Institute of Social Policy).

That could ultimately leaving these families less well off.

"The face value (of $1,200) ... is an illusion: the scheme's true value for the vast majority of Canadian families would be less than that -- considerably less, in many cases,'' Battle says...

"I don't think they're just focusing on higher income families but -- if you take the child care allowance -- whether they intended it or not, it does end up benefiting one-income and higher income families the most'' (said Battle).
But what of the much-vaunted GST cut?
In a recent report, (Finn Poschmann, associate director of research at the C.D. Howe Institute) determined the lowest-income earners -- people reporting less than $12,500 per year -- would save about $64 each year from the GST cut...

Very modest income families -- between $12,500 and $25,000 annually -- would save about $97 per year, he figures...

"The GST reduction will help low and modest income families, they (Tory policy makers) are not just looking at high-income families,'' he said.

"But in the end, that's who will get most of the benefit.''
And those are the relatively progressive tax cuts put forward by Harper - the article doesn't examine the relative benefit involved in the Cons' capital gains tax policy. Needless to say, as appealing as "less taxes" may sound, there's nothing in the Cons' plan that'll have any real positive effect for lower-earning Canadians...particularly when the likelihood of either additional inflation or compensatory interest rate increases is taken into account.

Not that the Libs have been any better at acknowledging the upper-class bias of their own tax proposals. But there is one party whose tax policy is actually aimed toward Canadians who can better use the help rather than those who will see it as a luxury. And if enough voters realize which party's plan will do the most to help them, then the NDP may just end up in a position to make sure the next government can't carry out a reverse Robin Hood operation.

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